Donald Trump’s back, and this means we can see some serious wiggle room for coins that aren’t named Bitcoin to go mainstream via ETFs.
Ripple (XRP) Solana (SOL), Dogecoin (DOGE), to name a few prominent ones, have been investors’ go-to for virtual assets for various non-trading use cases and to hedge against Bitcoin — they command a market cap of more than $200 billion.
The US currently allows (but only after it lost some key legal battles) Bitcoin and Ether ETFs, which let investors dip their toes into these digital assets without directly holding them.
An altcoin ETF though is an altogether different ball game.
They are infamous for their wild volatility, and while Trump hasn’t exactly pledged his heart to altcoin ETFs, his plans to make the US the crypto capital suggest it could be next on his list.
He has also vowed to put a “friendly face” at the top of the SEC, potentially clearing the path for a broader spectrum of cryptos to join the ETF club.
“There are good chances that altcoin ETFs will be treated more favorably, and those approval timelines would dramatically reduce,” Steffen Feike, founding partner at crypto and tech law firm Quantum Counsel, tells MONIIFY.
Who next?
Since Bitcoin ETFs hit the market, they have raked in an eye-popping $26 billion, while Ether funds…well, they’ve seen over $400 million slip right out the door.
Still, the buzz around these ETFs, with the likes of BlackRock getting into the game, has given crypto a hefty image boost, pulling in investors who once wouldn’t have touched it with a ten-foot pole.
The SEC’s already got a stack of applications for altcoin ETFs piled up — Solana (the fourth-biggest crypto), XRP (seventh), and even Litecoin (a humble 20th on the list).
Feike points to Cardano as the next contender as the industry scrambles to dish out more ways for investors to dive into the crypto pool.
People on X are already declaring it’s altcoin season, and some crypto bros are even dreaming that memecoins like DOGE — Trump’s new BFF Elon Musk’s pet crypto — might make it to ETF status.
Insiders like Carmelo Giuliano from Arcanum Ventures are of the opinion though that memecoin ETFs won’t be hitting the market anytime soon.
“We’ll see major tokens like Solana, Chainlink, Polkadot, Tron and Cosmos made into ETFs, but these assets are very volatile, so it’s a bit risky to build ETFs around anything other than Bitcoin or Ether right now,” he tells MONIIFY.
Instead, we’re more likely to see assets like gold, carbon credits and real estate getting tokenized on the blockchain, according to Giuliano.
End the farce?
A crypto-friendly president might just mean a more “chill” SEC for digital assets, but Trump’s actual pull over the agency? Still TBD.
FRNT Financial CEO Stephane Ouellette went on to Bloomberg to say that the agency might be “nicer” with a new crypto chief, but it is also a massive ship that’s tough to steer.
Word on the street is that current SEC Chair Gary Gensler, whom Trump has vowed to toss on Day One, could be heading out with a bang. Between now and then? The SEC’s expected to churn out rules and enforcement actions like it’s their last hurrah.
Just before Election Day, the SEC slapped the Web3 firm Immutable to its naughty list, joining Coinbase, Consensys, Ripple, OpenSea, and Crypto.com.
Arcanum’s Giuliano says it’s time for a full-blown regulatory overhaul and calls for a rulebook to build compliant digital assets without guesswork.
Give everyday people access to trade securities, he urges, and everyone can then acknowledge that most tokens are securities, ending the facade that everything’s a “true utility token.”
